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Beyond CPF: SDL & SHG Guide Singapore

Singapore employers managing payroll must navigate beyond CPF contributions. Understanding mandatory employer contributions, such as the Skills Development Levy (SDL) and Self-Help Group (SHG) funds, is essential for payroll compliance in Singapore.

This comprehensive employer guide explains SDL payment requirements, SHG contribution rates, payment methods, and how to avoid costly penalties while meeting your statutory obligations.

Skills Development Levy (SDL)

The Skills Development Levy (SDL) supports Singapore’s national workforce training and skills upgrading initiatives. SDL is a mandatory employer contribution in Singapore, separate from CPF obligations. All Singapore employers must pay SDL regardless of business size.

For Singapore Citizens and Permanent Residents, employers submit SDL payments through the CPF Board alongside monthly CPF contributions. For foreign employees, SDL payments go directly to SkillsFuture Singapore (SSG). Understanding SDL requirements ensures proper payroll compliance and avoids penalties.

How Much is SDL?

0.25% of each emplyee’s wages
Minimum of $2
Maximum of $11.25

Total SDL payable is the sum of all employees’ levy payable, rounded to the nearest dollar.

How to Pay for SDL?

For Singapore/PR employees:

Pay SDL together when paying CPF.

For foreign employees:

Pay SDL directly to SSG.

Penalties for Late Payment

The Skills Development Levy Regulations made under the Skills Development Levy Act 1979 provides for the imposition of a later payment penalty at the rate of q0% per annum of the amount outstanding.

Find out more here!

Self-Help Groups (SHG) Funds

SHG funds are for supporting low-income households in specific communities. SHG contributions are deducted from employees’ wages and form a part of CPF each month.

How Much to Pay For SHG Funds?

Rates are flat monthly amounts dependent on wage band. These examples are non-exhaustive

CDAC: S$0.50–S$3.00 (by monthly wage tier)
MBMF: typical ranges up to S$16.00
SINDA: S$1.00–S$7.00
ECF: S$2.00–S$16.00.

For the full list of contributions required, click here!

How to Pay for SHG Fund?

SHG deductions must be included when you submit CPF via CPF EZPay each month.

Which SHG Fund Should Your Employees Contribute to?

Assignment is based on ethnic group (NRIC/FIN) and religion (for MBMF). Employees may apply to opt out with the respective SHG. It is always, always important to look at the official tables for the latest updates to do with SHG rules and rates.

Chinese Development Assistance Council (CDAC) Fund

Chinese – Any person who is defined as Chinese on the Identity Card (IC)

Chinese employees who are Singaporean or PR should be contributing to the CDAC Fund.

Eurasian Community Fund (ECF)

Eurasian –Any person who is defined as Eurasian on the Identity Card (IC)

Eurasian employees who are Singaporean or PR should be contributing to the ECF.

Mosque Building & Mendaki Fund (MBMF)

Malay – Any person who is defined as Malay on the Identity Card (IC)

Malay Muslim employees who are Singaporean, PR or foreigners should be contributing to the MBMF.

Singapore Indian Development Association (SINDA) Fund

Indian– Any person who is defined as Indian on the Identity Card (IC).

This includes:

Bangladeshis, Bengalis, Parsees, Sikhs, Sinhalese, Telugu, Pakistanis, Sri Lankans, Goanese, Malayalee, Punjabis, Tamils, Gujaratis, Sindhis and all people originating from the Indian subcontinent.

Indian employees who are Singaporean, PR or foreigners should be contributing to the SINDA Fund.

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